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Weak crown plays the role of a built-in stabilizer. NB I am distant from the critical lockdown

According to the Czech Republic, the Czech National Bank left rates unchanged. The forecast is roughly fulfilled, which means that the years will remain at the current level until the middle of the first year. The type of coronavirus wave poses a great risk. The weak koruna helps to absorb it through the loosening of monetary conditions through the exchange rate channel.

The decision on rates was unanimous. The basic scene of the current forecast is still relatively long. However, the Bank Board assessed the risks to the forecast as still strong, while the current epidemiological situation increases uncertainty about future economic developments, according to the NB.

As stated by Governor NB Rusnok during the press of the conference, if the anti-pandemic restrictions took on a more general character, an insight into the black screen could occur. It is obvious that if the situation approaches the situation in the spring, it is possible that we will approach the alternative scene compared to the basic one. But let’s know it’s not the day, Rusnok said. The price we would pay for a restrictive measure is huge, he added. According to the Bank Board, it is not just a decline in GDP or employment, behind these droughts are the lives of the people. But we know that we are distant from the critical scene of the all-round lockdown, he said.

Due to the weakening of the koruna in the last few weeks, it has been difficult to see the state of the NB in ​​relation to this holiday trend. According to Rusnok, the crown responds to coronavirus salt and fully acts as a built-in stabilizer through the release of monetary conditions. At the moment, it fits into the context of development, NB takes into account that the weakening domestic space creates space for us, if it were to disintegrate the scene, we do not have to act in such a way that we immediately reach for unconventional instruments, warned the bank board.

The entry from the day of the meeting of the NB Bank Board was not surprising. Although the central bank is keeping up-to-date forecasts, which today helped the crown to a few stronger values, according to us, the years will remain at the current level for at least five years. Even so, at least in the medium term, we should be stronger. The key in this direction is to reach the full shutter and calm down the current strong nervous mood of the global market has calmed down.

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